Home Banking US Bank Failures Pile Up — Is It Just Noise?
Author: Anthony Noto | Photos: Shutterstock
Another U.S. bank collapses, and experts wonder whether the failure is a canary in a coal mine or a coincidence.
This article appears in the November issue of Global Finance Magazine.
A sixth U.S. bank failure this year has reignited a familiar question on Wall Street: Is the banking system flashing a 2023-like warning?
California’s Department of Financial Protection and Innovation closed Nano Banc of Irvine, California, on Sept. 25, citing the lender’s deteriorating financial condition, and appointed the Federal Deposit Insurance Corp. as receiver. Sunwest Bank assumed approximately $605 million in Nano Banc’s deposits.
The closure occurred about a month after regulators shut Philadelphia’s Tioga-Franklin Savings Bank. Other failed institutions include Metropolitan Capital Bank & Trust (Chicago), Community Bank and Trust (LaGrange, Georgia), Kentland Federal Savings and Loan Association (Kentland, Indiana), and Small Business Bank (Lenexa, Kansas).
That brings the 2026 tally to six, the most since 2017 and one more than in 2023, when Silicon Valley Bank (SVB), Signature Bank and First Republic Bank collapsed. While most of the experts Global Finance spoke to say the current failures appear small, lingering balance-sheet vulnerabilities mean the underlying risks of 2023 haven’t fully disappeared.
“They do share a pattern, but it isn’t the 2023 pattern,” said David Maya, global risk lead at Dublin-based management consultancy Accenture. “No deposit runs. No rate-driven bond losses. Every one of them was a slow failure — weak management, then losses, then the capital ran out.”
According to California’s DFPI , Nano Banc suffered from mismanagement, poor governance and “insider trading risks.” A similar “operational weakness” narrative followed Tioga-Franklin Savings Bank’s closure.
Maya cautioned against alarm. “All six together held about $1.4 billion in assets,” he said. “Silicon Valley Bank alone had $209 billion. This is not that.”
This year’s count is also a far cry from the 507 U.S. bank failures recorded between 2008 and 2014. Still, some industry experts are asking whether the liquidity and interest-rate shocks that toppled larger banks in 2023 are resurfacing.
Stephen Curry, founder and chairman of Endurance Advisory, said the problems exposed in 2023 have been only “partially fixed.”
“Uninsured deposits remain concentrated, and losses on held-to-maturity securities are still substantial,” he said. “To me, the biggest unresolved issue is supervisory follow-through. While the regulators did a good job identifying the problems, they still need to be consistent and timely in enforcing regulatory corrections.”
Europe offers a sharp contrast. The European Banking Authority said that banks in the European Union and European Economic Area remain resilient, with near-record capital ratios and solid asset quality.
Donald van Deventer, managing director of risk research and quantitative solutions at data and AI company SAS, attributes much of the gap to how mortgages are structured.
“European mortgages are much more likely to be floating rate or fixed rate for fairly short maturities before rate reset,” he said. “The 30-year U.S.-style fixed-rate m…